The Revenue Department of Thailand has just declared the abolishment of the 7 percent Value Added Tax (VAT) that had earlier been imposed on individual traders in the Cryptocurrency market. Thailand has experienced massive growth of the crypto market over the last few months and has now officially incorporated the trade on the country’s exchange platform regulated by Thai Securities and Exchange Commission (SEC).
Announcing this, Mr. Saroch Thongpracum, the director of legal affairs in the revenue department pointed out that before the abandonment; any Cryptocurrency transactions were subjected to income tax for both companies and individuals.
Mr. Saroch, however, insisted that the 15 percent tax on all capital gains still applies. Individual traders are still liable to pay this tax also referred to as a withholding tax charged on income earned in every transaction.
Even so, the VAT waiver comes as a huge relief for individual Cryptocurrency traders who prior to this, experienced a huge tax burden. The regulation will be affected as soon as the Revenue Department communicates to these individuals. Additionally, private companies launching Initial Coin Offering’s (ICOs) will also pay corporate income tax on all the income realized from the trade.
SEC Taking Over Control
The new 7 percent waiver will only apply to transactions conducted on the SEC trading platform. The SEC has taken over control of all the Cryptocurrency trades to effectively implement these directives. Under the new command, SEC will be the ultimate regulatory authority for digital assets. The following groups of Cryptocurrency traders will be affected:
• Brokers- those who link sellers and buyers in the market.
• Dealers- those who own and trade in virtual coins
• ICO portals- companies that deal in virtual coins and which are listing on the SEC platform.
The Minister of Finance will issue all of them with a license, the news outlet further detailed.
Even in the wake of this good news, the country’s Cryptocurrency market is set to through regulations to control its trade. SEC CEO informed that they were drafting a number of regulations on ICOs and Cryptocurrencies, and are expecting to roll it out by the end of June after conducting a public sensitization that is expected to run for a period of 2-3 weeks. Investment in digital assets is a highly volatile trade, which carries a lot of risks and must be regulated accordingly.
Financial Institutions Coming In
On the other hand, The Bank of Thailand has indicated that it is waiting for SEC to communicate more on the regulation it intends to put in place before it rolls out its plan. Through its Assistant Governor Chantavarn Sucharitakul, The Bank announced that it would not rush to implement any directives before fully analyzing the implications these new developments could have on the financial market.
Financial institutions regulated by the Central Bank had previously been requested not to provide any services that touched on cryptocurrency transactions. Such services included exchanging virtual coins for FIAT money through the banks. With the new developments, however, exchange services will be made possible through the banks. This will facilitate the trade and make it more profitable.